Native Mineral Resources has secured exclusive exploration and potential mining rights across 40 Citigold tenements surrounding Charters Towers, within trucking distance of its Blackjack plant. The opportunity carries no upfront payment, but nearly all reported ounces remain Inferred and must first survive a new drilling program.
- 40-tenement joint venture covering Central, Warrior and Stockholm
- Reported resources of about 760koz Indicated and 11Moz Inferred
- Ore may be hauled to NMR’s Blackjack processing plant
- NMR recovers eligible costs plus an 8% margin before a 50:50 surplus split
- A$5 million payment due after 8,000 fine ounces are produced
NMR expands its operating footprint around Charters Towers
Native Mineral Resources Holdings Limited (ASX:NMR) has signed a binding joint venture with Citigold Corporation (ASX:CTO) covering 40 tenements across the Central, Warrior and Stockholm areas of Queensland’s Charters Towers goldfield. The agreement gives NMR exclusive rights to exploration and proving-up drilling, while allowing it to decide later whether any mineralisation is sufficiently economic to mine.
The strategic attraction is proximity. All three areas sit within 10km of NMR’s Blackjack Operations, with Stockholm about 2km from the plant. If drilling supports development, NMR may haul and process material through its existing facility, which recently delivered record October Blackjack output after higher grades, throughput and recovery lifted refined production.
Large reported resource comes with a substantial confidence gap
The tenements host most of Citigold’s reported Charters Towers resources in the Central and Warrior areas: approximately 3.1 million tonnes at 7.6 grams per tonne gold for about 760,000 ounces Indicated, and 26 million tonnes at 14 grams per tonne for about 11 million ounces Inferred. No Mineral Resource is reported for Stockholm in this announcement.
That headline inventory is not yet a mine plan. Around 94% of the contained ounces in the table sit in the Inferred category, which the announcement describes as having a low level of geological confidence. Citigold’s underlying resource work dates back to its 2020 estimate, and no drilling has been undertaken since 2016. NMR’s first task will therefore be to test whether the historical resource can be converted into a sufficiently reliable and economically mineable feed source.
Cost recovery protects NMR before surplus is shared
The commercial structure limits NMR’s initial commitment: neither party pays upfront consideration and NMR can walk away after assessing the final drilling and assay results. If it proceeds, eligible expenditure on drilling, development, mining, processing, directly attributable financing and certain tenement costs can be recovered from gross smelt proceeds, with NMR entitled to an 8% margin on those costs.
After royalties and unrecovered eligible costs are deducted, remaining surplus is divided equally between NMR and Citigold. NMR must also pay Citigold A$5 million once production from the joint venture reaches 8,000 fine ounces, in addition to Citigold’s share of surplus. The payment is not counted as an NMR cost in the surplus calculation.
Drilling, approvals and economics now become the test
NMR will prioritise targets, set the drilling sequence and arrange contractors and regulatory approvals. It retains sole operational control over drilling and any later mining, but four leases are outside the existing environmental authority coverage and would require a separate or amended approval before mining could occur there.
The opportunity is consequently both substantial and conditional. The agreement puts a broad package of historic, high-grade ground beside NMR’s processing infrastructure, yet the next value-creating event is not production: it is evidence that the ounces can be upgraded, extracted and processed at an economic return.
Bottom Line?
The joint venture gives NMR low-cost access to a large nearby resource base, but the drilling program must turn historical Inferred ounces into a credible Blackjack feed source before the economics can be judged.
Questions in the middle?
- How much drilling will NMR require before deciding whether to proceed to mining?
- Can the reported Inferred ounces be converted into Indicated material at a scale that supports consistent Blackjack feed?
- What capital, approvals and operating costs will be needed before the 8,000-ounce production-payment trigger is reached?